Baby Boomers: 2 Dow Dividend Stocks Worth Rotating Into After a Volatile Quarter

Things are starting to look up for stocks again, with the S&P 500 recovering all of the ground it lost in March and April. Still, the painful ride investors were put through in the past quarter shouldn’t be soon forgotten. Many Baby Boomers who’ve found out they took a bit more risk than they would have liked when the S&P 500 narrowly escaped falling into bear market territory now have the opportunity to steer towards value as the market rally makes its next move.

While taking profits after the latest upside surge makes sense for older investors who’d like to jump ship from stocks to bonds, gold, or some other lower-risk asset, I’d argue that less-volatile, low-cost dividend stocks could be a better way to reduce more of the impact if another correction is in the cards for 2025.

The Dow Jones Industrial Average (DJIA) is home to some pretty promising blue chips, many of which appear richer with value than the broad S&P 500 at this juncture. Of course, the Dow has lagged the pack this year, down just shy of 7% while the S&P 500 is off closer to 5%. The main reason for the relative underperformance has to do with the index’s heavy weighting to UnitedHealth Group (NYSE:UNH), which is experiencing a crisis in recent weeks, with shares now down more than 40% year to date.

If it weren’t for the UNH plunge, the Dow would probably be on much better footing. In this piece, we’ll look at two Dow dividend payers that I view as cheap, oversold, and steeply undervalued.

Nike

Shares of footwear and apparel juggernaut Nike (NYSE:NKE) have continued their stumble in 2025, dragged down by tariffs, heightened competition, and a challenged consumer. Year to date, NKE shares are down more than 17% after ricocheting off multi-year lows close to $53 per share. As it stands, Nike is the third-worst performer in the Dow so far this year.

In the first quarter, billionaire hedge fund manager Bill Ackman sold out of his Nike stake, leaving remaining investors with many unanswered questions. It’s been a painful ride, and the turnaround plan has yet to reignite enthusiasm.

With the ailing apparel maker planning to sell its goods on Amazon (NASDAQ:AMZN), there’s hope that Nike could get a bit of a sales boost as it makes its products more widely available via third parties. In any case, tariff-driven price hikes are coming, and that could take some wind out of the firm’s sails as investors begin to demand results from its turnaround plan.

At this juncture, the headwinds seem a bit too strong, but if you’ve got a decade or more to wait, perhaps there is opportunity in snagging shares at 66% off their peak price. At the very least, dip-buyers can collect a swollen 2.7%-yielding dividend while they wait for new top boss Elliott Hill to prove himself.

Home Depot

Home Depot (NYSE:HD) is the ninth-worst year-to-date performer in the Dow basket, now down just shy of 5% so far this year. With a fresh earnings miss in the books, concerns that a recession could slow spending on home improvement projects, and mounting uncertainty over the response to tariffs, it’s not a mystery as to why many are ringing the register. For now, Home Depot isn’t raising prices in response to tariffs.

Given the questionable state of the housing market, perhaps relying on alternative “levers” is a better idea. Though Home Depot has more room to work with, it’s unclear just how much the firm is willing to “eat” the tariffs. Despite all the unknowns, I think the firm’s commitment to keep prices low and steady in the face of tariffs could allow it to gain a bit of market share over rivals.

At the end of the day, Home Depot is a master at operating at a very high and efficient level. Tariffs pose a unique challenge, but if there’s a firm that can overcome it, it’s Home Depot. At 24.8 times trailing P/E, with a 2.5% dividend yield, I’m a fan of the name.

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